Chancellor’s update – 26 March

Today we heard about some of the further measures the Government is taking regarding the ongoing support measures for dealing with Coronavirus related impacts.

The main focus was around support for self-employed workers, which was just under a week behind that for employees, but this is a vastly complicated area to review and police. We have highlighted below the main areas of the today’s briefing.

Employer guidance

  • An acknowledgement that details will be made available on the Coronavirus Job Retention Scheme tonight. (We will of course be looking at this closely and be issuing further guidance as soon as possible).

Self-employed

  • Self-employed individuals will get a similar support level to the employed workforce.
  • This will be the lower of £2,500 per month or 80% of average monthly profits. These amounts will be taxable income for the individual receiving them.
  • It will only apply to those with profits of less than £50,000 and the majority of income must be from self-employment.
  • The average profits will be calculated by reference to the last 3 tax returns to the year ending 5 April 2019. Where less than three years are available, the average will be calculated on that basis.
  • If no tax returns have been filed yet for a self-employed person, then there will be no support under this scheme.
  • This cash will not be available until June as there needs to be time to build the system, but will be backdated to March.

Dividends

  • There are no measures for people taking nominal salaries and topping up earnings with dividends. The chancellor did appear to imply that people should have obtained benefit from the employed scheme if they had paid themselves a suitable salary.

Things to note going forwards

  • The chancellor warned that disparities on tax rates for self-employed vs employed individuals will receive attention in the future.

As and when more detail emerges on these measures, we will of course keep you updated, although this isn’t expected soon given the June start date. In the meantime, we will focus on the detail of the Employer Coronavirus Job Retention Scheme as these are being published tonight, with around 90-95% of businesses we have spoken to, intending to use this measure.

 

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